| Monday, August 25, 2008 |
| Money Makeover: Gayla Baker |
 The Los Angeles Times Money Makeover: Teacher needs financial education profiles 38-year-old divorcee and mother of two, Gayla Baker who has made some stunningly poor financial moves:
Baker takes in $111,000 a year from her full-time job, child support and a part-time night-school gig teaching English to adults. But she has only $200 in savings.
Worse, her debts total $104,300. They consist of $67,000 in student loans for her master's degree, $24,200 for her car, $8,000 in CashCall and credit card bills and $5,100 owed to the Internal Revenue Service for back taxes. Baker has been using current income to pay tuition and expenses for her children's private-school education. The oldest, 18, is now in college, while the youngest, 11, is in elementary school. Yikes! But the comment I really hated hearing from Gayla was this one: She has a steady boyfriend, but they are not engaged.
"As soon as I'm married, then just all of my financial woes will go away," Baker said, sweeping her arms in a circle with a huge laugh. "I told him I just want to have myself together so that I can bring something to the table."
But by that time, she said, "I may not even want a husband." Is she really considering marriage over selling her unaffordable Lexus or buckling down, living within her means, and tackling her debt?
I think the financial planner, Sandra C. Field, mispoke (at least I hope she did) when she recommended the credit reporting site freecreditreport.com. I believe she meant to say AnnualCreditReport.com - that is the free official website that federal law required the three big credit reporting agencies to create and give away free reports. The other site, linked in the article, is the for-profit website which tries to sell you that rip-off credit monitoring service. Shame on the LATimes for linking to that one!Labels: Money Stories |
| posted by Boston Gal @ 11:09 PM *
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| 15 Comments: |
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She earns $110k and only pays $1000 a month in rent. Even though she has two children to look after hard to see how she could be having a hard time making ends meet. My first thought was: "does she do drugs" :)
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I agree with Moom. Child support income isn't taxable, I believe, so she's got quite a bit of net income to play with.
I'm also surprised that they recommended she use freecreditreport.com instead of annualcreditreport.com. Was that a slip-up or do they plug that site regularly?
Oh well, I think it's great that she's paying so much attention to her kids' education. I disagree with their advice to have her oldest son take student loans. She's going to have a HUGE pension so their point about "sacrificing her future" is wrong.
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I have to agree that her retirement seems completely secure. Am I correct that state employees, along with their pensions, get health care provided? If so, $84.000 per year at age 55 with free health care sounds pretty nice. It's her PRESENT she needs to get managed.
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Well I for one don't agree with m00m. Plenty of people outspend their income without it being drugs. Way to stereotype.
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OK, I get the student loan debt. But $ 8,000 in CashCall and credit card bills and $5,100 owed to the Internal Revenue Service for back taxes is totally ridiculous.
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Take the child out of private school, have the oldest child get loans (he'll survive) and Take back the Lexus.
She can knock out the payday loan in 4 month with focus, pay the minimun on the student loans and credit cards in the meantime.
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My eyes bugged out at the car costs and cell phone bill, as well. Her standard of living was just too high for someone in that much debt.
It frustrates me that freecreditreport.com probably gets all kinds of business because of confusion with annualcreditreport.com (even though I like their commercials.)
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What a horror show. In a few years, when the child support runs out or she loses her job for a few months, we'll read a sob story about how awful it is that this single mother is struggling to pay her bills, and this is just a sign of how awful America is, etc.
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Her pension is nice but remember the $111,000 she earns now is largely from that state job and she has to be paying a decent amount of it into her pension per month so her take home pay would be drastically reduced.
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This entire story is insane. She has a payday loan yet runs up charges at Macy's with her perfectly manicured nails driving around in her Lexus. It is really hard to feel empathy for her.
She had better get married before her looks start to fade or she gains a few more pounds. I hear guys are less likely to be a sugar daddy when you no longer look like a trophy wife.
I like wearing nice clothes and getting pedicures but pay off my 1 credit card each month.
I take time each month to explain to the child the power of compounding interest when she receives her "Early Savers" statement. The best way to ensure your children's future financial success is not be financing their college education but by leading by example!
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Yowzer: "a $2,400 loan that carries an interest rate of 99.25%".
That's a powerful argument for better financial education at all levels.
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I used to pay 7.5% into my state retirement plan, but I was exempt from paying 6.2% Social Security taxes.
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mOOm, that is what I think when I see profiles of whites who overspend. They must be on drugs. How clever and funny you are!
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I don't understand why everyone is in shock, she is the average american actually. Maybe less people make the money she does, but still buy video games, eat out everyday and, shop like its no tomorrow. Priorities just need to be shifted a bit thats all.
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Anon 8:42. Well, you're the one mentioning any kind of racial issue... I really wasn't thinking about that. Especially as someone who grew up as an ethnic minority in Britain and though I'm "white" according to US census definitions my wife isn't. And we don't live in America.
Anyway, I just saw "payday loan" (that's what cashcall is isn't it) and $110k income and just wrote what I thought. But maybe I was a bit drunk when I did that.
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She earns $110k and only pays $1000 a month in rent. Even though she has two children to look after hard to see how she could be having a hard time making ends meet. My first thought was: "does she do drugs" :)